Disappointing Earnings and CFO Departure Hit Bloom Energy's Stock

Shares of Bloom Energy Corp. took a nosedive, reaching a four-year low, following the release of the company's underwhelming earnings report and outlook. This downward trend was further exacerbated by the news of Chief Financial Officer Greg Cameron's departure after serving for four years. As a result, analysts have downgraded their ratings on Bloom Energy's stock.

In premarket trading, the stock (BE, +2.22%) plummeted by 19.1%, positioning it at its lowest closing price since June 29, 2020. Moreover, it was on track for the most significant one-day selloff since a 20.2% drop on May 6, 2022.

Sangita Jain, an analyst at KeyBanc Capital, downgraded their rating on the stock to sector weight after holding an overweight rating for at least two years. While Jain acknowledged the robust interest in Bloom's servers, they highlighted the uncertainty surrounding shipment timing to Korea as a cause for concern among investors.

Jain explained their decision saying, "This, coupled with the departure of a highly regarded CFO without a clear successor in place, leads us to step away until we have more clarity." In a note to clients, Jain expressed doubts due to these factors.

In the recent earnings report, Bloom Energy disclosed a 22.8% decline in fourth-quarter revenue, amounting to $356.9 million compared to $462.6 million in the same period last year. This figure fell short of the FactSet consensus estimate of $470.8 million.

During the post-earnings conference call with analysts, Founder and Chief Executive KR Sridhar revealed that the company had to halt deployments to Korea temporarily. This pause was necessary as Bloom Energy adjusted to newly implemented policies and procurement rules.

Despite these challenges, Bloom Energy remains committed to overcoming obstacles and regaining its market position. The next steps are crucial as the company seeks to rebound and create a more favorable outlook for the future.

Strong Business Outlook for Bloom Energy in Korea

According to an AlphaSense transcript, Bloom Energy is anticipating a strong business outlook in Korea for the second half of 2024 and beyond. Despite a decline in sales to Korea in the latter half of 2023 and a slow start in the first half of 2024, the company is confident in its future prospects.

In its fourth-quarter financial report, Bloom Energy revealed a significant turnaround, reporting a net income of $4.5 million, or 2 cents per share. This marks a substantial improvement from a loss of $47.2 million, or 23 cents per share, in the same period the previous year.

Adjusted earnings per share fell to 7 cents, missing the FactSet consensus of 9 cents, after excluding nonrecurring items.

Looking ahead to 2024, Bloom Energy has projected revenue in the range of $1.4 billion to $1.6 billion. However, this estimate falls short of the FactSet consensus from January, which forecasted revenue at $1.75 billion.

Mark Strouse from J.P. Morgan made significant changes to his position on Bloom's stock. Formerly overweight since May 2023, Strouse has downgraded his rating to neutral and lowered the price target from $19 to $14. He justified this decision by noting the lack of visibility into a more substantial increase in revenue and operating income. Strouse expressed concerns over the recent departure of CFO Cameron, as he played a key role in margin improvement efforts while with the company.

As of Thursday's closing, Bloom Energy had a market capitalization of $2.68 billion. Over the past year, the stock has experienced a decline of 48.8%, while the S&P 500 index has rallied 23%.